US dollar exchange rate slightly increases in Baghdad, Erbil

The US dollar exchange rate against the Iraqi dinar saw a modest uptick in both Baghdad and Erbil on Thursday, coinciding with the closure of the two primary stock exchanges in the nation. Following the shuttering of Baghdad’s Al-Kifah and Al-Harithiya stock exchanges, the US dollar exchange rate climbed to 1524.5 dinars, up from 1523 dinars earlier in the day.

According to reports from Shafaq News, currency exchange shops in Baghdad reported a range of 1535 dinars to 1515 dinars for the US dollar exchange rate. Meanwhile, in Erbil, the exchange rate fluctuated between 1523 dinars and 1522 dinars.

The Central Bank of Iraq (CBI) initiated the implementation of a new exchange rate for the US dollar last February, setting it at 1,300 dinars per dollar. This marked a departure from the previous official exchange rate of 1450 dinars per dollar, which had been prevalent in the parallel market at a rate of 1550 dinars.

Notably, in January 2023, the exchange rate of the US dollar against the local currency soared to 1610 dinars, while the official exchange rate remained at 1450 dinars per dollar. This disparity resulted in a gap of more than 10 percent between the two exchange rates.

The fluctuation in the US dollar exchange rate underscores the ongoing economic dynamics within Iraq, influenced by various factors including market demand, central bank policies, and geopolitical developments. Observers continue to monitor these shifts closely for their potential implications on the broader economy and financial stability.

As Iraq navigates through these currency fluctuations, stakeholders and policymakers remain vigilant in their efforts to maintain stability and foster sustainable economic growth amidst a challenging global landscape.